Understanding how car dealerships work helps you make informed decisions.
This guide explores everything you need to know about car dealerships, including how they operate, what services they offer, and how to choose the right one for your needs.
What Is a Car Dealership?
A car dealership is a business that sells new and/or used vehicles.
Car dealerships typically provide:
- New and pre-owned vehicle sales
- Financing and leasing options
- Assessing the value of current cars
- Maintenance, repairs, and OEM parts
Whether you're buying or selling, a dealership can ensure legal compliance.
Types of Car Dealerships
The type of dealership you choose can impact your vehicle selection.
Main types include:
- Offer new cars under brand contracts
- Sell various brands of used vehicles
- Buy-here, pay-here dealerships
- Operate digitally without a physical lot
Each type of dealership has advantages and limitations.
What to Look for in a Car Dealership
It’s important to consider customer service, pricing, and transparency.
Tips for selecting a dealership:
- Look for customer feedback and complaints
- Inventory matters
- Ask about warranties and service plans
- Choose dealers with multiple lending partners
Doing your research in advance can save money.
Why Choose a Dealership Over Private Sellers
Many buyers prefer dealerships over private sellers due to the range of services they provide.
Key benefits include:
- Certified pre-owned options
- Help getting approved for loans
- All paperwork done properly
- Ongoing support after you drive away
These benefits make car dealerships a go-to source for buying cars safely.
How Car Dealerships Make Money
A how to start a car dealership car dealership’s revenue comes from more than just selling vehicles.
How they stay in business:
- Profit from car sales and bonuses
- Add-on options with high margins
- Buying low and selling high on used cars
- Offering service for vehicle owners
Understanding this helps you spot upselling tactics.
Final Thoughts
Whether you're buying your first car or upgrading your ride, a dealership can guide you through every step.
With the right preparation, visiting a dealership can be a smart move for your next purchase.